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Full text of "Rapid Population Growth Consequences And Policy Implications"

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On the other hand, when household savings are more broadly defined to encompass all additions to family net worth, including investments that parents make in their offspring, it seems that current savings rates in low income countries are not as low as traditionally measured. The concurrent trends of rapid population growth and educational expansion have probably increased total household savings, while depressing only that portion of savings allocated to physical capital formation. Conversely, when and if birth rates do fall in low income countries, the rate of household physical savings could increase as human capital formation rates slow their advance at an aggregate level and more parents have the opportunity to invest in tangible assets once their offspring have gained independence.*
The reduction in death rates also increases returns from having a child; indeed, all forms of human investment would appear to grow more attractive as human life is prolonged and morbidity is reduced. But this increase in pecuniary returns to childbearing need not contribute directly to higher fertility, t
It is reasonable to assume that parents frame their reproductive goals in terms of their preferences for a certain number of surviving children (or sons), not in terms of births. Were this generally valid, parents would want to compensate for the incidence of death among their offspring by seeking the number of births required to give them their desired number of surviving children. At least two mechanisms might function to accomplish such an approximate balance between birth rates and child death rates. To assure its survival and progress, in the Darwinian long run, a society requires institutions that accommodate the prevailing regime of mortality. Social institutions
their capacity for physical savings will sharply rebound. Data arc clearly needed to explore and to test these predictions. Leff s (15) analysis of aggregate savings behavior across countries is suggestive of what might be found in micro household information, but to my knowledge no satisfactory analysis of micro data has been completed.
*From a societal perspective, Leibenstein has observed how changes in the quality of the labor force take place and concluded that more rapid population growth permits a more rapid replacement of the labor force and consequently a more rapid improvement in the average "quality" of the labor force. But because there exist resource constraints both on the public sector's provision of the supply of educational opportunities and on parents' demand for schooling for their children, more rapid population growth is likely to depress the average "quality" of new entrants to the labor force, lowering their productive capacity and relative earnings. From the standpoint of new entrants to the labor force, the slower rate of population growth is clearly preferred to a more rapid rate of population growth. Individual and social objectives may conflict in such a case. (See "The Impact of Population Growth on Economic Welfare: N on traditional Elements," in this volume.)
t The nonpecuniary returns associated with the psychological needs that children fulfill may diminish sharply after a certain number of children have been born. Moreover, the pecuniary returns from children may increasingly favor investing more in each child rather than having greater numbers. This shift in demand from quantity to quality is more likely to occur if parents have only a limited capacity to borrow. Imperfections